The Greek economy is expected to grow by 2.0 pct in the next three years, the European Commission said in its autumn forecast report released on Thursday.
The Commission report noted that Greece exited the adjustment programme amid a strengthening growth. However, the European Commission’s forecasts for economic growth in 2019 are slightly revised downwards compared with its forecast made in spring when it estimated that the Greek economy will grow by 2.3 pct in 2019.
The Commission’s forecasts are based on the assumption that there will be no change in fiscal policy in 2019 and 2020, which will result to a primary surplus of 3.9 pct of GDP for 2019.
“Negotiations for the 2019 budget were currently underway and it is expected that a final package of measures will lead to a primary suprlus of 3.5 pct of GDP in 2019. In this case, real growth will be higher and could reach 2.3 pct of GDP in 2019 and in 2020, which is in line with the Commission’s spring forecasts,” the report said.
Greek unemployment will continue falling, the report said, falling to 19.6 pct of the workforce in 2018 (20.1 pct in the spring forecast), to 18.2 pct in 2019 and 16.9 pct in 2020. Employment is expected to grow by 1.8 pct in 2018 and 1.6 pct in 2019.
The fiscal surplus is expected to reach 0.6 pct of GDp in 2018 (0.4 pct in the spring forecast) and to remain at the same levels in 2019 and 2020. The country’s public debt is expected to fall to 182.5 pct of GDP in 2018, to 174.9 pct in 2019 and 167.4 pct in 2020.
The inflation rate is projected to reach 0.8 pct in 2018, 1.2 pct in 2019 and 1.0 pct in 2020. Investments are expected to fall by 2.1 pct this year (it projected a 10.3 pct increase in its spring report) and to rise by 14.9 pct in 2019 and 9.6 pct in 2020.